Microsoft is preparing to cut thousands of jobs in the coming weeks, according to sources familiar with the plans reported by Bloomberg. The announcement is expected early next month, coinciding with the end of Microsoft’s fiscal year.
Impact Across Multiple Departments, Sales Most Affected
While details remain limited, multiple departments will be affected, with the sales team likely to face the largest reductions. This follows last month’s round of layoffs, where 6,000 employees were let go across various teams and seniority levels. At that time, Microsoft cited the need to reduce management layers and better position the company for success in a shifting market.
As of June 2024, Microsoft employed roughly 228,000 people, including 45,000 in sales and marketing. The previous round of job cuts reportedly spared sales and marketing, but recent strategy shifts indicate changes ahead. In April, Microsoft informed employees about plans to outsource software marketing for small and mid-sized customers to third-party firms, potentially reducing costs by replacing full-time staff with gig workers for short-term campaigns.
AI Investment Continues Amid Layoffs
Despite these layoffs, Microsoft has pledged to invest more than $80 billion in data centers focused on AI development. How these investments align with workforce reductions remains unclear.
Microsoft’s announcement comes amid growing job uncertainty in the tech industry. Amazon CEO Andy Jassy recently disclosed plans for AI agents to replace a significant number of employees. Intel is also preparing to cut 15-20% of its factory workforce as it deals with financial challenges.
Author’s Opinion
This wave of layoffs at Microsoft and other tech giants reflects the rapid evolution and automation reshaping the industry. While difficult for affected workers, companies are shifting toward leaner, more flexible models emphasizing AI and contract-based roles. The long-term success of this strategy hinges on balancing innovation with support for displaced employees.
Featured image credit: Heute
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